Wednesday, May 9, 2012

Is Theoretical Economics Like a Religion

I have heard the complaint that theoretical Economics is similar to a religion.  Theoretical Economics is making arguments based on a priori knowledge, which is knowledge that is true without empirical evidence.  It is argued to be true based on logical reasoning alone.  In math the argument: if A > B and B > C, then A > C.  This doesn't require statistical samplings and running regressions for us to know it is true.  Much of math is built on a priori ideas.  In Economics, an a priori argument could be the marginal utility of an object declines the more you have of it.  The marginal utility is how much enjoyment you receive out a given unit of objects.  Thus, a person may get a great deal of utility from having one computer.  However, the amount of utility a person gets from a second computer will be necessarily smaller than the first.  It is possible for the utility to be the same, but it will never be greater.  Surfing the net, checking email and so forth can be done on the first computer.  The second one can be used to run a web server, or do some kind of processing, but it will not add as much utility to the person as the first computer.  It is not necessary to conduct a survey and determine if the utility actually falls with the second computer.  Just through logic, we can know that utility will be smaller, and from there construct the demand curve.


Critics of the a priori approach compare it to being similar to religion.  What they are implying is that without conducting research and performing case studies, we are not doing actual science.  If we are not doing science, then it must be religion.  I believe these people are making a false dichotomy.  They divide the world into either being science (empirical studies) vs non-science, and group religion and a priori logic together.  But the world is not divided into these two groups.  By combining religion with a priori thinking, it implies that a priori logic is a myth.  Religion is something that people believe and don't try to prove using any form of logic - a priori or using empirical methods (a posteriori).

It is true that some have attempted to prove God's existence using a priori methods (Descartes), but these have all failed.  But just because people they tried and failed doesn't discredit the a priori method.  Religious people also have tried to use empirical data to prove God's existence and also failed, but these critics don't link empiricism with religion.

In my own view, empiricism has far more in common with religion than pure logic.  Ancient religious people were empiricists.  They would associate the sacrifice of a human or an animal with a good harvest.  They would then correlate the sacrifice with the harvest.  This is empirical thinking.  A modern person would think it is ridiculous to associate the death of an animal or person with a good harvest because there is no way to theoretically link the two.  But this is a priori thinking.

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